Barrett Business Services, Inc. v. Morgan Keegan & Co.

(Client: Morgan Keegan)

A Barrasso Usdin trial team won another victory before a FINRA arbitration panel for one of the firm’s broker-dealer clients in one of many high-yield bond funds cases the firm has tried recently. The funds lost over 90% of their market value in 2007 and early 2008. The claimants sued the broker-dealer, seeking over $3 million in compensatory damages, and even more in punitive damages and attorneys’ fees. The claimants asserted they wanted to invest in bond funds that were, at worst, only moderately risky. The claimants contended the broker-dealer had defrauded them by failing to disclose that the funds were invested largely in the “bottom tranches” of “toxic” subprime debt and, as a result, were highly speculative. The arbitration panel dismissed all of the claimants’ claims with prejudice and required the claimants to pay half the forum fees. The trial team consisted of George C. Freeman, III, Jamie L. Berger, and David N. Luder.